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Planning for healthcare in retirement is one of the most valuable steps you can take for your financial security, and it is more manageable than most people expect.
Recent studies have shown just how expensive healthcare can get in our later years. According to Fidelity Research, the average retired couple, both aged 65, may need about $315,000 saved after tax just to cover healthcare. That's a significant figure that underscores the value of planning ahead.
As people live longer and need more health services, having a strategy to manage expenses is critical. The good news: starting early gives you more options.
Originally published: October 2, 2024
Key figures to keep in mind:
Planning ahead can help fund these big expenses in retirement and offset the healthcare risk to your nest egg.
While Medicare provides valuable benefits, extra insurance is often needed to reduce out-of-pocket costs.
Medicare Part A covers hospital visits. Part B covers doctor appointments, tests, equipment, and more. Part D provides prescription drug coverage.
Popular choices to fill Medicare's gaps include:
Choosing supplemental policies wisely can optimize coverage and control costs.
Here are some recommended tips to help fund future medical costs:
Partnering with financial advisors to make a comprehensive retirement plan is also a smart idea.
The key is starting early, building a solid plan, and working with a financial professional you trust.
Savvly's Longevity Benefit is designed to help investors build potential income at later life milestones. It is not insurance, not a guaranteed product, and not FDIC insured. Learn more at savvly.com/disclosures.
The sooner you start planning, the more secure your later years can be.
This article is for informational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional before making retirement planning decisions.
Disclosures
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-linked investment benefits may work under certain assumptions. Actual results will vary. All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios — not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
In the event of death or early withdrawal, hypothetical scenarios assume that investors who exit early, or their estate in the event of death, may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active. Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor's personal circumstances.
Simulations may assume a 3% annual early withdrawal rate prior to payout or death. All figures shown are net of fees. No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance.
Past performance is not indicative of future results. The 8% annual market growth rate used in illustrations is a standardized assumption for modeling purposes only and does not represent the historical or expected performance of any specific investment. Note that early or voluntary withdrawals by other participants can affect fund performance and the size of distributions, and that a higher-than-expected number of participants reaching payout milestones may reduce the per-participant benefit received.
Savvly's Longevity Benefit is not a bank product, not FDIC insured, not insured by any federal government agency, not a guaranteed or insured investment, and not insurance. Investment values may decline.
Savvly's Longevity Benefit may not be suitable for all investors. Eligibility to invest is subject to qualification requirements and not all investors will be eligible. Investors should carefully consider their investment objectives, risk tolerance, time horizon, and financial situation before investing. See savvly.com/disclosures for current eligibility criteria, fees, risks, withdrawal terms, and fund assumptions.
This content is published by Savvly, Inc. Savvly has a financial interest in the products described and this content should not be interpreted as independent financial research or analysis. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
